Recent Study: China Shipping Report Q4 2014

From: Fast Market Research, Inc.
Published: Wed Sep 10 2014

We maintain our cautious view for China's shipping sector. While the outlook for China's traditional economic growth drivers such as heavy industry and real estate construction remains cloudy, the outlook facing the more consumer-focussed industries is relatively strong over the medium term. Overall, though, as the traditional sectors remain the dominant drivers of the economy, we remain cautious in our real GDP growth outlook. We expect the economy to expand by 7.1% in 2014, before slowing to average 6.1% over the next five years and caution that there are downside risks to this forecast.

After a decade-long cycle of high commodities prices partly boosted by stellar demand growth in China, the ongoing slowdown of the country's economy and rebalancing away from metal-intensive manufacturing and construction sectors raises questions over the future of China's commodities demand and import needs, with a possible negative knock-on effect on dry bulk imports in particular. We also caution that the inevitable bursting of the ongoing credit bubble could serve to undermine the profitability of the consumer-focused industries.

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We maintain our below-consensus forecast for China's real GDP growth of 7.1% in 2014 and 6.0% in 2015. China's HSBC Flash Purchasing Managers' Index (PMI) reached 50.8 in June 2014, easily outgunning consensus expectations of 49.7. However, major headwinds ranging from cooling real estate prices to broader financial system stresses will cap growth over the coming quarters.

Headline Industry Data

* 2014 Port of Shanghai tonnage throughput forecast to grow 2.5%, with container growth of 4.1% forecast for the year.
* 2014 Port of Shenzhen container throughput forecast to contract by 0.4%, with average growth of 1.2% during our forecast period.
* 2014 real trade growth forecast at 7.2% - an increase from 2013's estimated 4.9%.

Key Industry Trends

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The China Shipping Report has been researched at source and features latest-available data and Business Monitor International (BMI)'s independent forecasting, critically analysing international transport of dry bulk and containers. The report evaluates the global commodities and trade backdrop, alongside in-depth country-specific analysis of trade prospects. The report also contains company profiles covering leading multinational and national shipping companies and analysis of latest industry news, trends and regulatory developments in China.

BMI's China Shipping Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the shipping industry in China.

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